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Board of Review upholds plant's assessment

Station valued at $499,226,061

By Vinde Wells, Editor

Feb. 7, 2013

Some Ogle County taxing bodies will see an increase in revenues from Exelon Nuclear's Byron Generating Station when real estate taxes are paid later this year.

The Board of Review (BOR) voted unanimously Tuesday morning to uphold the $499 million dollar assessment of the nuclear plant set last fall for 2012 by Ogle County Supervisor of Assessments Jim Harrison.

"I still think Jim's method of calculating was the best," said BOR member Robert Godman, Byron. "I'd like to propose Jim's number of $499,226,061 with the condition that its set at that for the next four years."

BOR member Thomas Lewandowski, Oregon, agreed. "Based off the last few years, the $499 million is pretty consistent," he said.

Both Exelon Nuclear and the Byron School District, one of the taxing bodies that receives tax revenues from Byron station, challenged Harrison's assessment. Both filed appeals in November.

The previous year's assessment was $480 million.

The difference will mean Exelon Nuclear will pay an estimated total of $31.7 million in taxes to the 11 affected taxing bodies, $1.2 million more than last year.

The three-member BOR listened Jan. 29 to almost five hours of testimony from appraisers and attorneys representing both sides.

Exelon Nuclear's appeal set the plant's value at $296 million, while the school district's appeal said the plant is worth $731 million.

BOR member Joe Yockey, Stillman Valley, asked attorneys Roger Lewis, who represented Exelon Nuclear, and Stuart Whitt, who represented the school district, if the the two sides had attempted to reach a compromise since the Jan. 29 hearing.

Both Lewis and Whitt said no.

Lewis said the only discussion on an assessment agreement took place several months ago between Exelon officials and representatives of the 11 affected taxing bodies.

Yockey said the disparity of the appraisals makes it difficult to reach "reasonable number."

Part of the arguments Jan. 29 were over a $545 million deduction for decommissioning costs in Exelon Nuclear's appraisal.

Whitt objected vehemently because he said decommissioning costs have never been considered in previous appraisals.

He said the owners of nuclear generating stations are required by federal regulations to have a fund set up in advance to cover decommissioning costs.

The money, he said, comes from the bills customers pay.

"The decommissioning cost is not something we could consider as a discount," Yockey said Tuesday.

All three BOR members voted yes to the motion which called for the assessment to be set at $499 million through 2016.

Harrison, however, pointed out that because the BOR was dealing only with the 2012 assessment, the number would not be binding for the subsequent years.

After the vote Lewis pointed out that the BOR's assessment could be appealed to the Illinois Property Tax Appeal Board (PTAB).

"For the record, the parties are free to challenge this decision," he said.

"The money would be better spent on our kids' education than attorney fees," Yockey replied.

Harrison said it will likely be three years until PTAB would consider an appeal if one if filed.

Spokesmen for both sides left the appeal option open.

"I anticipate that someone will appeal it to PTAB," Whitt said. He said he appreciated the time and energy the BOR put into reaching its decision.

Exelon Nuclear spokesman Paul Dempsey said firm officials will discuss the new assessment.

"It's something our folks will take back and discuss," Dempsey said. "Exelon is always committed to paying our fair share of taxes."

He said company officials would favor a long-term agreement setting the plant's value.

Construction of the Byron Generating Station on North German Church Road south of Byron, began in 1975. The first reactor started producing electricity in 1985 and the second went on line in 1987.

Over the years the plant has been in operation, the assessment has fluctuated.

Commonwealth Edison, which then owned the plant, filed its first tax appeal in 1989 when the assessment was more than $1 billion.

The following year, the 11 taxing bodies formed the Ogle County Intergovernmental Agency Board to fight the tax appeals.

The first multi-year agreement, approved in early 1998, set the assessments for 1997-2004 at $471 million and settled a decade of lawsuits and tax appeals.

The BOR set the assessment at $366 million for 2005, $435 million for 2006, and $454 million for 2007.

A four-year agreement, approved in November of 2010, set the assessed value of the nuclear plant at $450 million for 2008, $460 million for 2009, $470 million for 2010, and $480 million for 2011. Besides setting the plant's value, the agreement settled a lawsuit and numerous tax appeals filed between 2005 and 2008.

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